top of page

Hospitality Industry Grapples With 63% Cost Surge

The hospitality sector, a cornerstone of the UK economy, is facing unprecedented challenges as cost surges cripple businesses across the nation. Research conducted by the price comparison website has shed light on the profound impact of rising costs, with the hospitality industry emerging as the hardest hit, grappling with a staggering 63% surge in expenses for goods and services between September 2022 and August 2023.

Among the industries surveyed, 'Accommodation and food service' businesses bore the brunt of the cost escalation, with nearly two-thirds (63%) reporting significant price hikes. This surge in expenses has placed immense strain on hospitality establishments already grappling with supply chain disruptions, post-pandemic recovery efforts, and soaring energy prices.

In the face of these challenges, the hospitality trade had hoped for relief measures in the Spring Budget, anticipating government support to navigate the tumultuous economic landscape. However, the Chancellor's Budget announcement fell short of expectations, drawing criticism from industry leaders for its lack of targeted assistance.

Kate Nicholls, chief executive of UKHospitality, lamented the missed opportunity, asserting that the Chancellor's budgetary measures maintained the status quo rather than providing the necessary impetus for sector recovery. Calls for a lower rate of VAT, business rate caps, and reduced wage costs went unanswered, leaving hospitality businesses grappling with financial uncertainty.

North of the border, the Scottish Licensed Trade Association (SLTA) echoed concerns over the lack of governmental intervention, highlighting the pressing need for a VAT reduction to alleviate the mounting financial burdens faced by hospitality businesses in Scotland.

As financial pressures mount within the industry, the Licensed Trade Charity (LTC) has witnessed a significant uptick in calls for support, reflecting the growing distress among drinks professionals. With a 43% increase in helpline calls in 2023, the LTC has been inundated with requests for emotional and financial assistance, underscoring the severity of the crisis gripping the hospitality sector.

Financial difficulties emerged as a predominant concern among callers, with a staggering 23% of all calls necessitating referrals to the grants team for financial aid. In response, the LTC disbursed £1.4 million in grants and services in 2023, a testament to its commitment to supporting individuals in need during these challenging times.

As the hospitality industry grapples with the economic fallout of rising costs, concerted efforts are needed to safeguard the livelihoods of businesses and workers alike. With mounting calls for government intervention and industry-wide support, the resilience of the hospitality sector will be tested as it navigates the uncertain road ahead.


Here at AGS Group, we specialise in Facilities Management across the UK & Europe for the hospitality sectors. With a proven track record of excellence, we have partnered with leading names in the hospitality industry, including renowned food chain restaurants such as Domino's Pizza, Pizza Hut, Costa Cafe, Tim Hortons, and many more. Our tailored solutions and unwavering commitment to quality have positioned us as trusted partners, enabling hospitality businesses to navigate the challenges of cost escalation and operational complexities with confidence. As industry leaders, we are dedicated to delivering innovative solutions that drive efficiency, enhance guest experiences, and ensure the seamless operation of hospitality establishments across the globe.

4 views0 comments

Recent Posts

See All


bottom of page